BUENO, vamos a hablar de THIRD PARTY FUNDING OF DISPUTE RESOLUTION, WHETHER

ARBITRATION
LITIGATIOn
REPASAR ANOTACIONES Y FOOTNOTES ! ! !
Chequear si el Legislative Council de HK ha adoptado la proposicin sin cambios
Stage funding

Julio Agosto 2017 Septiembre

DOMINGO! Lun Mar Mi Jue Vie Sb
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ENGLAND VIDEO Articule Art. 2 and 4)
APPROACH LESSONS Finance and Lets start writing
TO TPF FROM Litigation !
CHEVRON Fuding

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Artculo 5) Art 2 acabado
acabado NADA

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WE HAVE A NATURAL OR LEGAL ENTITY LOOKING FOR FINANCE RESOURCES REGARDING
A DISPUTE SETTLEMENT, DISPUTE OR ARBITRATION, MAYBE AS PLAINTIFF OR AS
DEFENDANT. So far, the next concerns rise at the present situation:
A working definition of Third Party Funder or Third Party Funding would be very helpful,
even though any definition coined at this stage may be overinclusive or underinclusive.
o Some authors define it as a commodity, other disagree
Obligation to disclosure the existence of a Funding Agreement to the Arbitrator/ to the other party?
o Disclosure of the name of the funding Entity? Only to the arbitrator? Both arbitrator and
respondent? (Advantage in Procedural Strategy for respondent)
o Disclosure of the terms of the Funding Agreement?
o What if there is a previous enforceable agreement between parties regarding the
disclosure/confidentiality of funding arrangements?
Obligation to disclosure sensitive information to the funder/Investor?
Weak Impartiality of Public Trade Funding Entities? Anyone can buy shares and try to press the
funder.
Conflict between Funder and Funded Party(Claimant): The Claimant may be interested in a non-
monetary settlement/award while the Funder might prefer a different conclusion (usually a monetary
award).
If the Funder concludes the case is not interesting anymore, is it allowed to leave the case? Under
any circumstances?
o May reclaim the money to the client?
o Is it allowed to sell the case to other entity?
Previous representation of adverse Party in a Litigation Proceeding, in which the lawyer may
(may not) have confidential information relating to the same (or related) litigation.
In Case the Funder pays the lawyer (very likely), how to protect Lawyers independent professional
judgement?
Focused in Funding Class Action? Problems of Representation of Claimants Will in (Shareholders)
Class Actions with Litigation Funding
Funding is only available-provided where a substantial financial remedy is sought with a high
likelihood of success.
There is a lack of protection for recipients of funding from withdrawal from the arrangement by the
funder.
There is a lack of protection for recipients of funding from the funders insolvency.
There is a lack of protection for defendants and courts from liability for adverse costs.
If the Claimant Wins, should the other party pay additional costs produced by the Funding
Agreement (TPF Costs)? Can the Arbitrator force this situation? (in England s, Norscot v. Essar,
ensaamiento del rbitro (confirmado por un tribunal) contra Respondent por intentar ahogar a
Claimant con un arbitraje inasumible economicamente)
The other party is interested in the disclosure of the whole Funding Agreement to make sure 1) the
proceeding is not 100% instigated by the Funder 2) verify the Funder may be responsible for the cost
of a possible adverse Award/Decision.
Fernandez de Masia: En nuestra opinin, entre las circunstancias concretas de cada caso para
ampliar el deber de revelacin habra que incluir una posible solicitud por la parte demandada de una
cautio judicatum solvi (Security for Costs). En este supuesto se puede sealar que si existen
suficientes pruebas que sugieren que el demandante es insolvente o va a llegar a serlo al final del
procedimiento arbitral, la existencia de TPF, junto con otros factores que muestren un abuso o una
prctica de mala fe por parte del demandante58, puede influenciar en la decisin del tribunal arbitral
requirindole a que se obligue a revelar los trminos del acuerdo de financiacin. En tal caso, los
 tribunales arbitrales deberan revisar de forma detallada el contenido del acuerdo y ms en concreto,
las clusulas y trminos que establezcan si y bajo qu circunstancias el tercero financiador puede dar
por terminada la financiacin y, si adems se hace responsable de una posible condena en costas59.
Posibilidad de exigir una fianza a un Claimant (y/o Funder) de mala fe cmo buscar un enfoque
comparado?
CCI (X v. Y and Z, ICC Case Procedural Order of 3 August 2012), ESTO ES, SECURITY FOR
COSTS IN DIFFERENT JURISDICTIONS W. Kirtley y K. Wietrzykowsky, Should an Arbitral
Tribunal Order Security for Costs when an Impecunious Claimant Is Relying upon Third Party
Funding?, Journal of International Arbitration, Vol. 30, n. 1, 2013, pp. 19-21.

As, por una parte, en la regla 32.1 del citado proyecto de Reglas de Arbitraje del SIAC se permite
que el tribunal pueda tomar en cuenta la existencia de acuerdos de financiacin en el momento de
prorratear las costas del arbitraje, y adems, en la regla 34 se concede al tribunal el poder de
ordenar condenas en costas contra terceros financiadores cuando se estime apropiado.
Enforcement of Funded Arbitral Award in Jurisdiction that has express laws or a public policy
against funding (Thailand), supported by New York Convention Art V 2 (b)1 contrary to public
policy.
Effects of third party funding in adverse costs awards
El Funding agreement no es revelado de modo que, si el Laudo arbitral no es satisfactorio, siempre
puede ser revelado de mala fe para repetir todo el proceso arbitral Existen mecanismos para
penalizar esta conducta?

U.S. Chamber Institute for Legal Reform (ILR)

Critics of litigation funding point to the need to protect the purity of justice by preventing third par-
ties from manipulating the litigation process. One of the more outspoken opponentsthe U.S.
Chamber Institute for Legal Reform (ILR), which is an advocacy group of the U.S. Chamber of
Commercehas identified four negative public policy consequences of third-party investments
in litigation:
(1) they can increase the volume of abusive litigation because the funders can hedge any
investment against their entire portfolio of cases;
(2) they undercut the parties and lawyers control over litigation because the funders can be
expected to try to exert control over . . . strategic decisions;
(3) they can prolong litigation by making reasonable settlement offers less attractive because of
the investors extra demand on a share of the proceeds; and
(4) they compromise the attorney-client relationship and diminish the professional independence
of attorneys by injecting a third-party into disputes.5

These potential consequences, according to the ILR, represent a clear and present danger to the impartial
and efficient administration of civil justice in the United States.

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Sahani pag 62
Inverstor Inverstor ARBITRATOR

FUNDER

Claimant Respondent